1 462 IBN18 (MAURITIUS) LIMITED IBN18 (Mauritius) Limited
2 IBN18 (MAURITIUS) LIMITED 463 Independent Auditors Report Independent Auditors Report to the member of IBN18 (Mauritius) Limited Report on the Financial Statements We have audited the financial statements of ibn 18 (Mauritius) Limited from page 7 to 18 which comprise the statement of financial position at 31 March 2015, the statement of comprehensive income, changes in equity and cash flows for the year then ended and a summary of significant accounting policies and other explanatory notes. This report is made solely to the Company s member, as a body, in accordance with Section 205 of the Mauritius Companies Act. Our audit work has been undertaken so that we might state to the Company s member those matters that are required to state to them in an auditors report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company s member as a body, for our audit work, for this report, or for the opinions we have formed. Directors Responsibility for the Financial Statements The directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and in compliance with the requirements of the Mauritius Companies Act and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Company preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of the Company at 31 March 2015 and of its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards and comply with the Mauritius Companies Act. Report on Other Legal and Regulatory Requirements Mauritius Companies Act We have no relationship with or interests in the Company other than in our capacity as auditors. We have obtained all the information and explanations we have required. In our opinion proper accounting records have been kept by the Company as far as it appears from our examination of those records. ROY SERVANSINGH ASSOCIATES Licensed Auditors SIGNING PARTER SAMRAT C. SERVANSINGH (FCCA) Licensed by FRC Date : Date :
3 464 IBN18 (MAURITIUS) LIMITED Statement of Financial Position as at 31 March 2015 Notes 31 March March 2014 ASSETS Current assets Deposits, advances and prepayments 6 48,132,146 46,843,255 Cash and bank balances 7 35,567 79,480 48,167,713 46,922,735 Total assets 48,167,713 46,922,735 EQUITY AND LIABILITIES Equity Share capital Revenue deficit (8,132,599) (9,379,090) Total equity (8,132,499) (9,378,990) Non-current liabilities Debentures 9 56,249,900 56,249,900 Current liabilities Account payables 25,261 13,461 Taxation 10 25,051 38,364 Total liabilities 50,312 51,825 Total equity and liabilities 48,167,713 46,922,735 The financial statements were approved by the directors on... DIRECTOR NAME: DIRECTOR NAME: The accounting policies and the notes form an integral part of these financial statements
4 IBN18 (MAURITIUS) LIMITED 465 Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 March 2015 Note Year ended Year ended 31 March March 2014 INCOME Interest on deposits Interest on others 1,303,355 1,297,697 1,303,708 1,298,551 EXPENSES Audit fees 3,500 4,000 Legal and professional fees and other expenses 9,452 5,668 Financial charges 5,714 10,098 18,666 19,766 Profit for the year before taxation 1,285,042 1,278,785 Taxation 10 (38,551) (38,364) Profit for the year after taxation 1,246,491 1,240,421 Other comprehensive income - - Total comprehensive income for the year 1,246,491 1,240,421 The accounting policies and the notes form an integral part of these financial statements
5 466 IBN18 (MAURITIUS) LIMITED Statement of Changes in Equity for the year ended 31 March, 2015 Share Revenue Capital Deficit Total At 01 April (10,619,511) (10,619,411) Total comprehensive income for the year - 1,240,421 1,240,421 At 31 March (9,379,090) (9,378,990) At 01 April (9,379,090) (9,378,990) Total comprehensive income for the year - 1,246,491 1,246,491 At 31 March (8,132,599) (8,132,499) The accounting policies and the notes form an integral part of these financial statements
6 IBN18 (MAURITIUS) LIMITED 467 Statement of Cash Flows for the year ended 31 March 2015 Cash flow from operating activities Year ended Year ended 31 March March 2014 Profit for the year before taxation 1,285,042 1,278,785 Adjustments for: Change in account receivable (1,288,892) (1,292,666) Change in account payable 11,800 3,101 7,950 (10,780) Less: Tax paid (51,863) (33,926) Net cash used in operating activities (43,913) (44,706) Net decrease in cash and cash equivalents (43,913) (44,706) Cash and cash equivalents at beginning of the year 79, ,186 Cash and cash equivalents at end of the year 35,567 79,480 The accounting policies and the notes form an integral part of these financial statements
7 468 IBN18 (MAURITIUS) LIMITED Notes to and forming part of the Financial Statements for the year ended 31 March, GENERAL INFORMATION The Company was incorporated as a private limited company in the Republic of Mauritius on 19 February The principal activity of the Company is that of investment holding trading and providing consultancy services in the telecom and other fields. The Company was issued a Global Business Licence Category 1 on 27 September ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all periods presented. Basis of preparation The financial statements have been prepared on the historical cost basis except for the measurement at fair values of the financial instruments carried on the statement of financial position. Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables. The preparation of financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company s accounting policies. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. There are no critical estimates or judgements made by the Company for the year ended 31 March Financial instruments Financial instruments carried on the statement of financial position include deposits, advances and prepayments, cash and bank balances, and accounts payables. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item. Cash and cash equivalents Cash and cash equivalent includes cash in hand, deposit held at call with banks, other short term highly liquid investment with original maturities of three months or less and bank overdrafts. Bank overdrafts are shown within borrowing in current liabilities on the statement of financial position. Share capital Ordinary shares are classified as equity. Trade receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables. Payables Payables are recognised initially at fair value and subsequently stated at amortised cost. The difference between the proceeds and the amount payable is recognised over the period of the payable using the effective interest method. Functional and presentation currency The financial statements are presented in United States dollars ( ) which is the company s functional and presentation currency. The Company holds a Category 1 Global Business Licence under the Financial Services Act 2007, which requires that the company s business or other activity is carried on in a currency other than the Mauritian rupee. Derecognition of financial assets and liabilities Financial assets A financial asset (or, where applicable a part of a financial asset or part of a Group of similar financial assets) is derecognised when:
8 IBN18 (MAURITIUS) LIMITED 469 Notes to and forming part of the Financial Statements for the year ended 31 March, 2015 The rights to receive cash flows from the asset have expired; The Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a pass through arrangement; or The Company has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Company has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Company s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay. Financial liabilities A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in statement of profit or loss and other comprehensive income. Provisions Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made. Income tax Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of period / year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of profit or loss and other comprehensive income. Monetary assets and liabilities expressed in foreign currencies at year-end date are translated into at the exchange rates ruling at the reporting date. Translation differences on non-monetary financial assets and liabilities, such as equities at fair value through profit or loss are recognised in the income statement within the fair value net gain or loss. Translation differences on non-monetary items, such as equities, classified as available-for-sale financial assets are included in the fair value reserve in equity. Revenue recognition Interest income is recognised on a time-proportionate basis using the effective interest method and includes interest income from debt securities. Related parties Related parties are individuals and companies where the individual or company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions.
9 470 IBN18 (MAURITIUS) LIMITED Notes to and forming part of the Financial Statements for the year ended 31 March, CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES The following standards have been adopted by the Company for the first time for the financial year beginning on or after 1 January Standards Description IAS 39 Financial Instruments: Recognition and Introduces a narrow-scope exception to the requirement for the Measurement discontinuation of hedge accounting in IAS 39 by allowing hedge accounting to continue in a situation in which a derivative that has been designated as a hedging instrument is novated from one counterparty to a central counterparty, as a consequence of new laws or regulations, if specific conditions are met. IAS 36 Impairment of Assets Clarifies the scope of certain disclosures about the recoverable amount of impaired assets. IAS 32 Financial Instruments: Presentation Addresses inconsistencies in current practice when applying the offsetting criteria in IAS 32. IFRS 10 Consolidated Financial Statements, IFRS 12 Defines an investment entity and introduces an exception to Disclosure of Interests in Other entities and IAS 27 consolidating particular subsidiaries for investment entities Separate Financial Statements The adoption of these amendments to the standards have not had had any impact on these financial statements 4. STANDARDS ISSUED BUT NOT YET EFFECTIVE The new standards and amendments to standards and interpretations are effective for annual periods beginning after 01 January 2014, and have not been applied in preparing these financial statements. Standards Description Effective date for accounting periods beginning on or after IAS 19 Defined Benefit Plans: Introduces a narrow-scope amendment to simplify the July 1, 2014 Employee Contributions * accounting for contributions that are independent of the number of years of employee service eg, employee contributions that are calculated according to a fixed percentage of salary. Annual Improvements ( Cycle) IFRS 2 Share-based payment IFRS 3 Business Combinations IFRS 8 Operating Segments IAS 16 Property, Plant and Equipment IAS 24 Related Party This publication is expected to set out minor July 1, 2014 Disclosures amendments. IAS 38 Intangible Assets Annual Improvements ( Cycle) IFRS 3 Business Combinations IFRS 13 Fair Value Measurement IAS 40 Investment Property
10 IBN18 (MAURITIUS) LIMITED 471 Notes to and forming part of the Financial Statements for the year ended 31 March, 2015 Standards Description Effective date for accounting periods beginning on or after IFRS7 Financial Instruments: Amendments resulting from September 2014 Annual January 1, 2015 Disclosures Improvements to IFRSs IFRS 10 Consolidated Financial Sale or Contribution of Assets between an Investor and January 1, 2016 Statements; its Associate or Joint Venture IAS 28 Investments in Associates and Joint Ventures (Amended in 2011) IFRS 11 Joint Arrangements Accounting for Acquisitions of Interests in Joint Operations. IFRS 14 Regulatory Deferral Accounts (New in 2014) The objective of IFRS 14 is to specify the financial reporting requirements for regulatory deferral account balances that arise when an entity provides good or services to customers at a price or rate that is subject to rate regulation. Clarification of Acceptable Methods of Depreciation and Amortisation IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets re: IAS 16 Property, Plant and Agriculture: Bearer Plants Equipment and In accordance with specific requirements in IAS 16 IAS 41 Agriculture and IAS 41 IAS 27 Separate Financial Equity Method in Separate Financial Statements Statements (Amended in 2011) IFRS 9 Financial Instruments Hedge Accounting To be determined IFRS7 Financial Instruments: Hedge Accounting; Disclosures Simultaneously with IFRS 9, in accordance with specific requirements in IFRS 7 and IAS 39 IAS 39 Financial Instruments: Recognition and measurement There are no other standards and IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company. 5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY. Critical accounting judgments in applying the Company s accounting policies In the process of applying the Company s accounting policies, which are described in Note 2, the directors have made the following judgements that have the most significant effect on the amounts recognised in the financial statements:- Determination of functional currency The determination of the functional currency of the Company is critical since recording of transactions and exchange differences arising there from are dependent on the functional currency selected. As described in Note 2, the directors have considered those factors described therein and have determined that the functional currency of the Company is the United States Dollar ( ).
11 472 IBN18 (MAURITIUS) LIMITED Notes to and forming part of the Financial Statements for the year ended 31 March, DEPOSITS, ADVANCES AND PREPAYMENTS 31 March March 2014 Prepaid expenses 7,217 1,590 Loans to fellow subsidiaries 48,124,901 46,841,546 Interest accured but not due ,132,146 46,843, CASH AND BANK BALANCES 31 March March 2014 Balance in current Account 18,860 8,217 Balance in deposit Account 16,707 71,263 35,567 79, SHARE CAPITAL 31 March March 2014 Issued, subscribed and paid up Equity shares of 1.00 each fully paid DEBENTURES 31 March Issued, subscribed and paid up Optionally convertible debentures 56,249,900 56,249,900 56,249,900 56,249, TAXATION The Company, being the holder of a Category 1 Global Business Licence, is subject to income tax in Mauritius at the rate of 15 %. However, it is entitled to a credit equivalent to the higher of the actual foreign tax suffered and 80 % of the Mauritian tax on its foreign source income, thus reducing its maximum effective tax rate to 3%. A provision for tax of 38,551 ( : 38,364) has been made in the financial statements with regards to profit which arose as from the date the Company was converted to a Category 1 Business Licence Company. 31 March March 2014 Charge for the year 38,551 38,364 Less APS (13,500) - 25,051 38,364 Tax reconciliation: A reconciliation of the income tax expense based on accounting profit and actual income tax expense is as follows: 31 March March 2014 Profit before taxation 1,285,042 1,278,785 Profit charge to income tax 1,285,042 1,278,785 Income tax at 15% 192, ,818 Foreign tax (credit)/ allowances of 80% (154,205) (153,454) Deferred tax not recognised ,551 38,364
12 IBN18 (MAURITIUS) LIMITED 473 Notes to and forming part of the Financial Statements for the year ended 31 March, PARENT COMPANY ibn18 (Mauritius) Limited is a wholly owned subsidiary of TV18 Broadcast Limited, a public company incorporated under the laws of India and listed on the Bombay Stock Exchange and the National Stock Exchange of India. 12. RETIREMENT BENEFITS During the year there was no employee on the payroll of the Company entitled to retirement benefits. 13. RELATED PARTY DISCLOSURES Relationship TV18 Broadcast Limited Parent Company BK Holdings Ltd (Merge with Network 18 Holding Ltd. with effect from 6th June 2014) Fellow subsidiary Television 18 Media & Investment Ltd. Fellow subsidiary Network18 Holding Ltd. Fellow subsidiary RELATED PARTY TRANSACTIONS (i) BK Holdings Ltd. 31 March March 2014 a) TRANSACTIONS Balance Transferred to BK Holding on amalgamation (26,253,849) 752,816 b) BALANCE RECEIVABLE - 26,253,849 (ii) Television 18 Media & Investment Ltd. a) TRANSACTIONS Interest on ICD 550, ,881 b) BALANCE RECEIVABLE 21,138,236 20,587,698 (iii) TV 18 Broadcast Limited a) Interest on Debenture 4,300 9,796 b) BALANCE PAYABLE 56,263,996 56,259,696 (iv) Network 18 Holding Limited Balance Transferred from BK Holding on amalgamation 26,253,849 - a) Interest on ICD 732,816 - b) BALANCE RECEIVABLE 26,986, FAIR VALUE The carrying amount of deposits, advances and prepayments, cash and bank balances and account payables approximate their fair values. 15. FINANCIAL SUMMARY 31 March March 2014 Opening balance (9,379,090) (10,619,511) Profit for the year 1,246,491 1,240,421 Loss carried forward (8,132,599) (9,379,090) 16. GOING CONCERN The financial statements have been prepared on a going concern basis which assumes that the Company will continue in operational existence for the foreseeable future. The validity of this assumption depends on the continued support of the shareholder. The directors are of the opinion that this support will be forthcoming over the next twelve months. They therefore believe that it is appropriate for the financial statements to be prepared on a going concern basis.